If you recall a few years back the dome of the state capitol was covered by white tarps as workers renovated it. The joke was when all the scaffolding and tarps finally came down, instead of the gold dome there’d be a huge Xcel Energy logo followed by the words, “why rent when we can own.”
Xcel again proved its preeminent power over every crack and crevasse of state government when the governor’s appointed Public Utilities Commission approved Xcel’s plan to close two state-of-the-art power plants a decade before they’re supposed to. At the same time the PUC acknowledges Xcel was lying when they said the move would save us money.
As one PUC commissioner said, his decision wasn’t based on the numbers, but by something, “intangible.” Sadly, a working family’s power bill is a bit more tangible.
The public relations spin on this corporate heist is glorious. Even though the coal-fired power plants, Comanche 1 and 2, are the most clean-burning that modern technology allows, making them the cleanest in the nation, they still use vilified coal, so this move looks green. But really, it’s only about the other green.
It wouldn’t matter to Xcel if the Comanche plants were 100 percent powered by zero-emission bunny flatulence, the corporatist money is in the closing plants and building new ones.
Since the sun doesn’t always shine and the wind doesn’t always blow, Xcel convinced the PUC to let them build three and a half times more “power plant” than what they are closing. This is to “guarantee” the same amount of consistent power output. So, they’re closing 660 megawatts of low-cost, dependable coal power to build 2,400 megawatts worth of inconsistent solar and wind power plants, with the excuse that some of that new energy will be for projected future needs.
It’s worth reading that again because it’s easy to miss the point. It’s like buying three Toyota Priuses to replace your one new Camry. Presumably one of the Priuses will be working when you need to drive. But you get to make loan payments on all three.
This wouldn’t be an issue if the cost of this scheme was born by Xcel’s shareholders. But, of course, it’s not. Xcel gets to charge us customers for it. In fact, they get to make a guaranteed 10 percent rate of return on it. That’s 10 percent multiplied three and a half times over, for building three and a half times more power generation than is already working just fine.
So just how is your 401k doing by comparison? What guaranteed rate of return do you get? Wouldn’t it be nice if, overnight, you could make a guaranteed 10 percent on three and a half times more than what’s in your account now? You might only have a financial planner. Xcel has a state government.
Oh, by the way, they still get to charge us for the old plants they’re retiring. So, make that four and a half times.
Just how belligerent is Xcel when it comes to fleecing its customers? As a coalition of ratepayers, organized by my colleague at the Independence Institute, Amy Cooke, challenged the proposal in front of the PUC, one of their expert witness found $88 million of errors in Xcel’s calculations. Xcel had to cop to it. If not for this ratepayers’ coalition, that would have been passed on to you.
It’s comforting to know the PUC and our government-run watchdog, the Office of Consumer Counsel, are there to catch these “errors” to protect the public interest.
As Cooke notes, Xcel’s profit per ratepayer has jumped 76.7 percent, from $178.09 in 2006 to $314.75 in 2016.
Xcel has political cover to get away with all this thanks to the man at the top. Although the state legislature rebuffed mandates to create a Colorado version of the Obama Clean Energy Plan, our governor (acting very presidential by the way), put out an executive order to just do it anyway. Whether this order has any legal weight, doesn’t matter. It was a signal to his PUC and his Office of Consumer Counsel to go along.
Does that mean a future governor, say Jared Polis, has sole power to just mandate the state go to 100 percent renewable energy all by his lonesome? The way the broken system works now, he may. The cost of that conversion is estimated at $45 billion.
Imagine the guaranteed 10 percent return on all that.
And Xcel’s tagline? Responsible by nature? Indeed.
Jon Caldara is president of the Independence Institute, a free market think tank in Denver.